SYDNEY / SINGAPORE (Reuters) — Asian
stock markets were little moved on Wednesday after a Chinese
manufacturing survey met expectations, but the Australian dollar
plunged to a two-week low after data showed surprisingly low
inflation in that country's economy.

Investors hoping that the Chinese HSBC manufacturing PMI data for
April would show some stabilization in the slowing economy were
relieved when the survey came in at 48.3, still in contractionary
territory but slightly above the March number.

Asian shares barely reacted to that data although China's stock
markets, both the Shanghai Composite Index and the China Enterprises
Index of the leading offshore Chinese listings in Hong Kong, were
about a quarter of a percent weaker.

The Aussie fell after data showing Australian consumer price
inflation was a surprisingly low 0.6 percent last quarter.

The currency slid more than half a U.S. cent to $0.9295 in reaction
to the soft inflation reading. Interbank futures rallied as the
market pared back the risk that the Reserve Bank of Australia will
have to raise interest rates before the year-end.

"The fall in the Aussie was quite large considering that interest
rate markets weren't pricing a hike until mid-2015 anyway," said
Sean Callow, currency strategist at Westpac.

"The slide gives the impression that Aussie bears have been waiting
for a reason to bash it and are jumping on the opportunity."

Australia already has high yields relative to its rich world peers
which, combined with improving economic data, has been attracting
offshore money into the local dollar.

Other Asian stock markets crept higher following merger-driven gains
in Europe and on Wall Street.

The better mood owed much to Wall Street where the Dow rose 0.4
percent, while the S&P 500 gained 0.41 percent and the Nasdaq 0.97
percent.

The FTSEurofirst 300 index of top European shares jumped 1.34
percent on Tuesday.

CHINA INFUSES CASH

On Tuesday, China's central bank said it will cut the amount of
deposits rural banks must hold as reserves by between 0.5 and 2
percentage points, the latest in a series of measures to help combat
a slowing economy.

"The impact of a selective RRR cut is still limited as it will only
inject as much as RMB100 billion liquidity into the system," noted
analysts at ANZ.

"We would treat the move as a signal which reflects that the
accommodative monetary policy stance will be maintained over the
foreseeable future, given that the real economy is expected to
remain lukewarm and inflation pressures are mild."

The U.S. dollar was otherwise sidelined at 102.60 yen and $1.3814
per euro, having held to tight ranges for some days now.

In the United States and Europe all the talk was of mergers, this
time in the pharmaceutical sector.

In commodity markets, U.S. crude futures fell ahead of data expected
to show that U.S. inventories have risen close to record highs.
Brent also fell but was cushioned by continued concerns over the
stand-off in Eastern Ukraine.

Brent crude was quoted 17 cents firmer at $109.44 a barrel, after
reaching a six-week high of $110.36 last week. U.S. crude added 11
cents to $101.86 a barrel.

Gold remained out of favor after touching its lowest in more than
two months on Tuesday, weighed down by gains in Wall Street stocks
and as outflows from physical gold funds pointed to weak investment
appetite.

Early Wednesday, spot gold was trading at $1,284.4 an ounce, just
off a trough of $1,277.10.